Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/53296
Authors: 
Dong, Bin
Torgler, Benno
Year of Publication: 
2011
Series/Report no.: 
Nota di lavoro // Fondazione Eni Enrico Mattei: Global challenges 08.2011
Abstract: 
This paper presents theoretical and empirical evidence on the nexus between corruption and democracy. We establish a political economy model where the effect of democracy on corruption is conditional on income distribution and property rights protection. Our empirical analysis with cross-national panel data provides evidence that is consistent with the theoretical prediction. Moreover, the effect of democratization on corruption depends on the protection of property rights and income equality which shows that corruption is a nonlinear function of these variables. The results indicate that democracy will work better as a control of corruption if the property rights system works and there is a low level of income inequality. On the other hand if property rights are not secured and there is strong income inequality, democracy may even lead to an increase of corruption. In addition, property rights protection and the mitigation of income inequality contribute in a strong manner to the reduction of corruption.
Subjects: 
Corruption
Democracy
Income inequality
Property rights
JEL: 
D73
H11
P16
Document Type: 
Working Paper

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